The Central Bank of Sri Lanka released the latest Purchasing Managers’ Index (PMI) data for September 2024, showing continued expansion in both the manufacturing and services sectors, albeit at a slower rate compared to the previous month.
Manufacturing PMI
Sri Lanka’s Manufacturing PMI recorded a value of 54.1 in September, indicating an expansion in manufacturing activities. This figure, however, represents a slight decline from the August PMI of 55.5. The sub-indices for New Orders and Production contributed to the overall expansion, driven mainly by growth in the food and beverage manufacturing sector. In addition, an accumulation of stock purchases, likely in preparation for the upcoming festive season, boosted the index. However, the employment sub-index showed contraction, reflecting a slowdown in hiring, while Suppliers’ Delivery Time lengthened at a slower rate.
The outlook for the manufacturing sector remains positive for the coming three months, driven by optimism surrounding year-end seasonal demand.
Services PMI
The Services PMI also reflected expansion, with a Business Activity Index of 53.4 in September 2024, down from 65.2 in August. This decline marks a slower rate of expansion compared to the previous month. Notably, the financial services sector experienced significant growth, alongside improvements in education, professional services, real estate, and transportation. However, business activity in wholesale and retail trade, IT programming, and telecommunications remained flat compared to August, while declines were noted in other sectors.
Despite the slight contraction in employment and backlog of work, expectations for the services sector over the next three months remain positive, bolstered by favorable macroeconomic conditions.
Global Outlook
On the global front, PMI data indicates a mixed outlook. While India and the US are showing signs of expansion in both manufacturing and services, China and the Eurozone continue to struggle with contractions, potentially impacting Sri Lanka’s trade dynamics in the months to come.
This analysis highlights the ongoing resilience of Sri Lanka’s economy in both manufacturing and services sectors, despite global economic uncertainty.
Source: Central Bank of Sri Lanka, PMI Report (September 2024)